Pew International Journalism Program

Outlook for Latin America Grim, Expert Warns

By Tiare Rath, Fall 2002 Pew Fellow

WASHINGTON, October 3, 2002 - Latin America is experiencing one of its worst economic crises in decades and conditions are likely to get worse, a leading expert on the region warned today.

Peter Hakim, president of the Washington-based Inter-American Dialogue, said many Latin American economies have been in a deep recession since 1998. Growth has plummeted, foreign investment is declining, and unemployment is at record levels throughout the region. "In Latin America, it really is: 'it's the economy stupid,'" he said during a seminar sponsored by the Pew International Journalism Program at Johns Hopkins University's School of Advanced International Studies.

Hakim said the Bush administration has paid only "minimal and sporadic" attention to Latin America's distress, partly due to its intense focus on fighting terrorism. That, in turn, has bred resentment and growing anti-Americanism all across the region. "What has bothered Latin America the most has been the sheer neglect of Argentina," he said.

Once the richest country in the region, Argentina has experienced a virtual collapse of its economy in the last two and a half years, Hakim said. The nation's economy has shrunk by 25 percent, unemployment is close to 30 percent, and 55 percent of the population lives in poverty. Crime and violence have escalated not only in Argentina but also throughout the region, Hakim said.

Two other countries in crisis are Brazil and Colombia, Hakim noted. In Brazil, leftist leader Luiz Inacio Lula da Silva is poised to win the presidential elections. He has often criticized international financial institutions, and despite his newly moderate tone, foreign capital may flee the country if he takes power. "He might not have too much of a window to show what he can do," Hakim said.

Hakim called Colombia's new president, Alvaro Uribe, an "impressive figure" whose attempts to build up the military against guerrillas may prove successful, but warned that the country's economy is "on a knife-edge."

In addition to its current economic woes, Latin America currently suffers a leadership crisis, rampant corruption, and weak institutions, Hakim said. As a result of the last five years of hardship, support for democracy is diminishing throughout the region. But Hakim said he doesn't expect the military dictatorships of the 1970's and 1980's to recur. A more likely development, he said, would be the emergence of populist authoritarian leaders.